US stocks ended sharply lower on Monday after Standard & Poor’s (S&P) revised its rating outlook on the United States to negative.

The S&P 500 Index was down 14.54 points, or 1.10 percent, at 1,305.14. The Dow Jones Industrial Average was down 140.24 points, or 1.14 percent, at 12,201.59. The Nasdaq Composite Index declined 1.06 percent.

S&P on Monday cut its outlook on the US from ‘stable’ to ‘negative’ citing nation’s very large budget deficit and rising indebtedness.

According to the rating agency, the US total government deficit fluctuated between 2 percent and 5 percent of gross domestic product (GDP) from 2003 to 2008. However, it has ballooned to more than 11 percent in 2009 and has yet to recover, S&P noted.

However, the rating agency affirmed its ‘AAA’ rating on the US saying that the economy is flexible and highly diversified.

Among the Dow components, Alcoa, JP Morgan and United Tech fell more than 2 percent, while Bank of America and Caterpillar plunged more than 3.09 percent.

Citigroup Inc. (NYSE:C) shares gained 0.96 percent to $4.46 after reporting slightly higher than expected first quarter earnings. The company reported first quarter net income of $3 billion or $0.10 per shares against analysts’ estimation of $0.09 per share.

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